barging have agreements in place to barge and rail. new york has been doing it. honolulu has tried to but are being tried in court. there were going to barge material to washington state. supervisor mirkarimi: commissioner avalos. supervisor avalos: you mentioned honolulu and new york. where do they barge to? i am not sure if it is a myth, but new york used to barge out and dump in the ocean. what are the conditions in honolulu? >> honolulu was going to ship to washington state. that has been tied up in court.

it has not happened. new york used to go to the fresh kills landfill. they are now in an agreement with new jersey to barge to a new jersey planned build. i do not have that in my notes. we have that in the file in the office. the agreement is to go into place in 2012. it is between two ports. supervisor avalos: honolulu to washington state, it does not seem like we're talking about a barge. it will be more like a container ship. >> that is right. we were trying to find anything with a ship. supervisor avalos: one of the ideas the port brought up was that currently we have the bay bridge under construction. there are a great deal of barges used to bring

construction material to the bay bridge. that might be available in future years. you have certain conditions that could be optimized for future use of the same vessels. in new york, are we talking about containerships or something comparable to what is done in the bay area for a bridge construction? >> it is not containerships in new york. it is barges. i do not know how they compare in size to what you have here. supervisor avalos: were you able to explore environmental conditions about barging at all? what risks there may be to the bay? anyway the environmental conditions could be optimized if the barging options were to be utilized? >> it does have risks for

contamination in the bay. it would reduce truck traffic and the carbon footprint. it would reduce wear and tear on the roads. other than that, we have not. supervisor avalos: are there any barging catastrophes we know of in any jurisdictions? >> none that we looked at. we also looked to gat what was g on with rail haul. los angeles is looking to have that put in place by 2013. new york and new jersey barge to rail agreement is in the works and should be in place by 2012 or 2013. those are the main ones. there are others going on. those are the three major ones.

>> can you say more about los angeles? what exactly are they doing? >> i can if i pull the report out. it is the los angeles county sanitation district. they are working on building a facility near the point to hills -- puento hills landfill to the mesquite landfill. i do not know more about it other than the basics. they are putting the facility in. it is under construction now. expect to have it ready by 2012. -- they expect to have it ready by 2012. to summarize, we found san

francisco has a high diversion rate. san francisco has good commercial and residential rates. san francisco has very good services. unlike the other jurisdictions in the greater bay area, you have no formal documentation of the terms and conditions of the services. you do not have the ability if you wish to go out to competitive procurement some time in the future. we believe both of those are important. we believe there should be documentation of what the service standards are, the rate setting process, so that is available in written documents. we believe it would be important to you to have the flexibility to bid if you would like to do so. we do not believe you have to. you have good rates.

we believe it is important to have that flexibility. supervisor mirkarimi: one of the things that stood out for me in the report was the issue of the franchise agreement. that is one area where i think more information is perhaps needed. can you talk about what a franchise agreement is? how does it work in jurisdictions with an agreement? >> the franchise agreement documents what is paid to the jurisdiction you do not have to have the franchise agreement to have phones or contributions paid to you. the franchise agreement formally documents what your services are, how you will provide them, what the terms of

the services are, whether it can be extended and for how long. it sets forth the insurance requirements. it says what is in a dignified and what is not in the case of problems. -- what is indemnified and what is not in the case of problems. it provides information on specific services. what should a residential customer expect? i expect to have collection one time a week. or i do not. it tells the commercial customers what they get. it formalizes what is going on in the service, how the service is to be provided. many franchise agreements provide for penalties or

administrative charges in the event things are not done as required. they give you the ability. it is a legal contract. >> in terms of the franchise agreement, what is the range paid? >> it varies considerably. in most cases, the franchise agreement is what we would term as pass through costs. is built into the rates. the lowest when i know of is less than 1%. that is a unique situation in an old contract. the highest i am aware of in an actual franchise agreement is close to 20%. there are all kinds of other fees also paid. it's as franchise fee payments range from 2% to 21%.

>> the one i am thinking of that is less than 1% is really a dollar value. it is $1.50 per household. >> do you know what that would mean for san francisco in terms of the amounts? you have an idea of what the amount would be for other jurisdictions? >> i believe you are somewhere in the middle to low on the range. if it is passed through, it will affect your rates. you could probably come in and ouask for a 50% fee. i am sure recology would be happy to provide that, but the new rates would go up. >> something else that caught my eye is on page 29 of the report, it says that the study found that average residential

customer rates that selected competitively were slightly lower than the jurisdictions that used in non-competitive process to select service providers. >> correct. we made it that as a factual statement based on the results of the survey. that is what we found. we cannot say that going out to bid will get you lower rates. we have examples we're going out to bid has resulted in higher rates. we have examples where negotiating has resulted in lower rates. it is very much a case by case situation. the real factor that happens is in most cases when and jurisdiction goes out to bid or negotiate, they almost always ask for additional services or fees. in that case, the rates will go

up. supervisor mirkarimi: regarding the franchise fee question that supervisor campos was asking about, what about jurisdictions that have a combination of fees? they may have other fees that are bundled. do you have a delineation of what those look like exactly customer >> in our appendices -- of exactly what those look like? >> in our appendices, we did list the fees we found. many jurisdictions are unwilling to tell us what their fee structure is because they do not want that to be public. we know from being involved in a lot of franchisees that a variety of jurisdictions have

direct payments for administrative costs. they have fee's for road repair. they have fee's for recycling. we know oakland has a franchise fee. i think it is 4.8 million. they have a recycling fee of around $7 million that pays for recycling services. then they have a city fee that pays for graffiti, keep oakland beautiful, all types of recycling oriented programs. i believe those fees total about $29 million. that is pretty substantial percentage considering the size of the contract. it is also just one example of the types of fees. santa rosa gets' a three and a

thousand dollars a year contribution to a trust fund to be used for a variety of things from public grants to the boys' club. everythinbody negotiates differt types of things. -- santa rosa gets' a $300,000 contribution to a trust fund. supervisor mirkarimi: is there anything that speaks to more of a comparison? >> i cannot think there's anybody that really compares to you. san jose does not charge residential franchise fees. however, they have a variety of the ministry if these -- administrative fees. that is not public. they pay for a lot of it through those. supervisor mirkarimi: can you

give me a sense of what fees residents pay and how it compares to other jurisdictions that have a franchise fee or not in addition to other fees they pay? i am looking for where we ranked. >> i am not sure i can. we have details in the appendices. franchise fees are only one of many factors that come into play. supervisor mirkarimi: you were referencing this earlier. is it your understanding that the franchise fees go directly into the municipality general fund in addition to other a signed peace -- assigned fees or those that set aside for other services that have already been

delineated? >> it is my understanding that there are jurisdictions that do it both ways. normally that decision is made by the jurisdictions legal counsel. we've talked to legal counsel that think it is appropriate for the general fund. we've talked to legal counsel that think it is not appropriate for the general fund. supervisor mirkarimi: you have used oakland as an example. can you walk me through the pros and cons of what oakland does or how the customer's benefit as compared to san francisco customers? that is in terms of the fees they pay and what they get. >> i am not sure how it applies to the pro and con. the ft structure -- their fee

structure is fairly average. it is close to yours. we know is $29 million that comes in. $7 million of that is used to pay their recycling collector. you have to take that into account. they provide a variety of services to the residents that seem happy. the rates are equivalent to what is going on in the average of the jurisdictions. in my experience, they get a fairly good benefit. supervisor mirkarimi: apples to apples, do they get exactly what we get or vice versa? i am looking for some heft to this analysis. >> we did not try to get into that death. it really is not apples to apples. -- we did not really get into

that depth. a lot of your city services are paid for provided by recol ogy. a lot of fears are by cws or waste management. we've not compared the details of what you eat it. i would love to answer but i do not have the information. supervisor mirkarimi: what about examples so i can walk away with more than anecdotal? i have looked at the appendices. give me something that oakland does that we do not, residential or commercial. >> i do not know the details of what both of you do down to that level. supervisor mirkarimi: what about what we do versus what oakland does not? what about compost, for example? >> the only thing i can tell

you that is in your rates that is not in oakland's is that recology takes care of some of the costs on tons. i do not believe oakland has disposal costs taken care of. it's still flows through the rates. i cannot give a detailed comparison of the two service structures. supervisor mirkarimi: thank you. appreciate it. supervisor campos: the one area that stands out as an area that i feel like to have more information on is the area of what actually is paid to or received by san francisco in terms of a fee or benefit as it compares to what other

jurisdictions get from these vendors. you talk about oakland receiving $29 million. a chunk of that goes to the general fund. how does that compare to what we receive? everyone knows we are facing a substantial budget deficit. we have to figure out ways to make sure that we leverage every asset the city has. i want to make sure the san francisco is getting its fair share. that is where i feel more information could be obtained. commissioner avalos? supervisor avalos: what kind of assets as the current vendor gain by the work they do in the city? is it possible those assets

could also be city assets as well? are the only in the hands of recology? is there a way that could be considered part of the public domain as well? it is virtually public-service been provided. rate payers are paying for the service. it is something the city has condemned with the current agreement that has lasted decades. -- it is something the city has condoned with the current agreement that has lasted decades. >> i have no idea of the documents in place. that is not something we looked at. supervisor mirkarimi: i know we're facing a tight timeline. if we ask you to go back and with the question that goes to the heart of what a number of us were asking about how we're getting compares to what other jurisdictions are getting, how

long would it take you to do that comparison and look at the issue that commissioner avalos brought up? >> and like to get three weeks to a month. -- i would like to get three weeks to a month. let me give you a caveat. to compare services, we will have to have cooperation from the haulers that provide services. a lot of jurisdictions including oakland and san francisco have city facilities collected either at the discounted rate or for no charge. there is no way for us to tell you on the city by city basis with the value of that is. that has to come from the haulers. in addition to the big three, there are 19 other ones plus one national one. the cities themselves may not

want the information released. we would be happy to try and tell you what the results are. i can guarantee you we will not get it from everybody. supervisor mirkarimi: thank you very much. if you can stand by in case any other questions come by. miss miller? we have representatives from rcology and melody standing by. supervisor mirkarimi: miss nutter, thank you for being here and working with the lafco staff to make sure we have as much information as we can have. >> she and her staff were always available to us as consultants. there were very professional in providing data. i believe we will get nothing

but cooperation from her staff and your current provider. >> i am here to address you on the study commissioned. i thought i would put a chart here on the overhead projector that may answer some of the questions. you may not be able to see that well. this charge is provided to all of you. it was distributed this morning. you should have at your desks. it may be in the package provided to you. it shows the effective franchise fees currently receive for the city and county of san francisco is about 10%. this chart adds up all of the fees paid directly to the city from recology through the rate setting process and the free

services. some include the fees paid directly to the city. those are in pound accounts, vehicle license fees, debris box permit fees, business tax, and facility permit fees. that equals the sum total of payments to the city of about $11 million. free services received by the city include free disposal, the city twitter can collection, discounted collection services, the clean team event, and other miscellaneous events throughout the year. that is a value of about $18 million. the total fees adn free services received is about $29 million. i wanted to highlight that because that seemed to be the direction of the questions. supervisor mirkarimi: is there a

document that outlines the terms and conditions for the contractual relationship? is there a document that says this is everything they are supposed to pay? >> it is documentation from the rate setting process. i would like to bring up robert haley. has gone through the process and can tell you what is included in terms of documentation. supervisor mirkarimi: is there a single document that outlines this? >> roberts kentucky what documentation is. -- robert can tell you what the documentation is. >> there is quite a bit of documentation in the last rate process. there was a lot of discussion on the subject. there is one exhibit that outlines the costs in the rates for these services.

in the actual application, there is a table that talks about the impound account and those kinds of things. there are quite a few things in the record that would give you information on this. supervisor mirkarimi: i am looking for a contractual, legally binding document that says what they are supposed to pay. >> we do not use a contract in san francisco. supervisor mirkarimi: commissioner avalos? supervisor avalos: i appreciate the line of questioning about what they provide. i agree that they provide a great service. communities across san francisco have benefited. it seems the service could be arbitrary depending on what the issue is and what service is being renewed or increased. that has some benefits. it would be great to have

something that would be more global in how the new services are rendered to the city and what the benefits are. having clarity about that is good practice in government. >> i hear the questions of the commission and the concerns regarding documentation. our main concern is to ensure that since we have a system that works, we have a system in place that has worked for many years, and that is highlighted, we are succeeding in having the highest ever generate, that we want to ensure that even if we are looking at additional documentation for our system, that our system is not disrupted. we are working aggressively to

reach zero waste by 2020, and any part we -- in the work we're doing would severely jeopardize our ability to reach that goal. that is our perspective, how we can keep having momentum to move down the path to reach zero waste by 2020. commissioner campos: just a follow-up -- was this information shared with r3? >> yes. it was sent on the morning of wednesday, april 13. >> yes, that is correct. was too late to make it in the final report, and that is why you have that as a separate item. commissioner campos: that goes to my earlier point. this information, it probably is the first time for me that i have seen anything that details the amount that is paid by recology to the city. it makes sense if you go back

and get more information that this is information that they take into account. just a final point about the breakdown -- who decided what the amount would be, the 10.6%, and we decided the allocation of the fees -- who decided the allocation of the fees? >> my understanding is it is part of the process between recology and the city. commissioner campos: in other jurisdictions -- oakland being one of them -- the city council actually has a say over rates. to your knowledge, the board of supervisors has never opined on what the amount should be or what the allocation of these funds should be? >> not to our knowledge, but other -- under